Regulations could hamper biomass project
Libby is the top choice for a company looking to build a $46 million plant that would use new technology to turn forest debris into 5 million gallons of liquid fuel per year, but there’s a catch.
Federal regulations governing the tax credits that would make the operation economically feasible specifically exclude national forest lands as a source of raw material.
Lincoln County Port Authority board members discussed the proposal from Colbert, Wash., based Bioenergy Fuels Inc. during a meeting last week. In recent emails to port authority representatives, BFI chief executive officer Ron Rebenitsch, who toured the port authority’s industrial park last month, identified Libby as the number one choice for the plant if the vital tax credit issue can be overcome.
Benefits to locating in Libby noted in documents provided by BFI include the availability of reasonably priced forest biomass, existing infrastructure, low electricity costs, a stable workforce, availability of financing incentives, and strong local support.
Port authority board chairman Jim Mayo introduced the proposal as “potentially good news.”
“To keep this project moving I would like to see us have a point person to make sure we can do everything we can,” Mayo said.
Mayo pointed out that former port authority director Paul Rumelhart, who worked on previous biomass projects for the organization, has been in contact with BFI and toured the industrial park with Rebenitsch in March. He moved to hire Rumelhart to continue working on the project at a rate of $30 per hour for up to 30 hours per month for the next six months, and the board unanimously approved the motion.
“We want to be a resource for them and facilitate as much as possible, and they know it,” said port authority director Tina Oliphant.
Lobbying Montana’s congressional delegation for a change in regulations governing renewable energy tax credits will be a top priority. The Energy Independence and Security Act of 2007 mandates that various types of renewable fuels – such as ethanol – be blended with gasoline and diesel fuel, but incentives defining “renewable biomass” allow the use of wood products only from non-federal land.
In an email to Rumelhart, Rebenitsch said changing the rules may require edits to the federal Farm Bill or to regulations overseen by the Environmental Protection Agency, “or it may be as simple as inserting one line in upcoming legislation stating that biomass from the federal lands in the Kootenai National Forest qualify as ‘Renewable Biomass.’”
Oliphant expressed confidence in BFI’s ability to follow through on the project if the federal regulations can be changed.
“They have a big background in alternative energy, so they know what they’re up against,” she said.
Port authority board member Clint Oster – a retired professor of public and environmental affairs at Indiana University – noted that BFI claims that its proprietary processes result in a fuel “that’s chemically indistinguishable from the diesel you’re getting with petroleum.”
“They don’t tell you much about how they do it, but if this is true it would seem to take away the disadvantages you get with biodiesel and with ethanol,” Oster said.
Oliphant cautioned that the proposal is still in the early stages and will take some time to see through.
“All of this is a three-year project,” she said. “It’s not something that’s going to happen in the next six months.”